Interviews and new Inman Intel Index results show that broker headcount — once a universal barometer of brokerage success — has disappeared. Instead, the focus has turned to “better, best agents.”
This is the second story Recruiting War ’24is a multi-part series available exclusively to Intel subscribers about how brokerage firms poach and retain top brokers in a down market. Read part one here, and stay tuned for future stories – all available with your Intel subscription.
“When the market slows down, competition becomes more intense.”
When Coldwell Banker President and CEO Kamini Lane speaks out, she’s not just talking about the fight to go public. Finding real estate talent is also her top priority.
“When the market shrinks, the elite rise to the top, and the best agents are the ones who get fewer listings (remaining),” Lane told Intel recently. “Because of that dynamic, we naturally look for more Good and the best agent.”
The market has indeed shrunk over the past two years, and Lane’s comments suggest many companies have made fundamental adjustments.
As discussed in Part One of this series, the importance of headcount—the once ubiquitous barometer of brokerage success—has disappeared. Instead, the company is now less focused on numbers and more focused on “better, best agents.”
In part two of this series, Intel speaks with industry leaders like Lane. These conversations confirmed that a shift had occurred. Quantity is out, quality is the priority, and the competition is very fierce.
But that’s not all.
Today, not only is competition more intense, but recruiting top talent is now the biggest challenge many industry leaders face today, according to results from a March Inman Intel Index survey.
Here’s what industry leaders are doing in response.
How do brokers find agents?
Industry leaders who spoke to Intel overwhelmingly agreed with Lane’s comments about seeking quality agents. They tend to find quality agents through organic contact with agents as well as direct outreach.
- compass: Rory Golod, president of growth and communications at Compass, said the “number one channel” for finding and recruiting new talent is “agents through referrals from other agents.” Compass does, however, have a large team focused solely on recruiting.
- “There are over 60 people on the team, and about 30 to 40 people supporting the function. There are about 100 of them.
- EXp real estate: The massive virtual brokerage has an internal growth team of 10 people but hopes to double that number, the company said. Michael Valdes, the brokerage’s chief growth officer, told Intel that the company grows primarily through agents’ engagement with colleagues.
- “So far, it’s been almost organic growth,” Valdez said.
- EXp has seen a recent increase in the number of agents approaching the company directly for franchise deals.
- Coldwell Banker: Lane told Intel that her company “does not have a large external recruiting team to bring in agents.” Instead, the company tries to “match each new hire with a local office leader.”
- In the search for a new Coldwell Banker agent, local leaders did a lot of the heavy lifting.
- “We’re always interested in inbounds,” Lane added. “We have a form on the website. We’ve had tremendous interest through the website.
- Coldwell banker Warburg: Kevelyn Guzman, regional vice president at Coldwell Banker Warburg, told Intel that her company proactively seeks agents through “networking events, industry conferences or direct outreach.”
Big draw
To stand out and attract talent, companies prioritize everything from revenue sharing to technology.
- re/max: Ben Fairfield, vice president of recruitment and retention at RE/MAX, told Intel that agents joining his company are looking for technology, brand awareness and educational resources. Top producers often want to collaborate with other top producers, he said.
- “Eagles don’t land in duck ponds. One of the biggest reasons we see people coming here is they want to connect with the best.
- compass: Reiterating a point previously made by Compass, Golord said: “The biggest takeaway is that our technology platform has really driven our growth.”
- experience: Valdez said agents are attracted to eXp because of its technology and culture. But in addition to long-term revenue sharing and equity gains, the company also operates several different incentive programs.
- The Boost program provides financial incentives for teams and agencies, the Thrive program provides equity benefits to team leaders, and Accelerate is designed to help agents maximize revenue share earnings in their first year with the company.
- Coldwell Banker: The company does offer incentives to new agents, but Lane said those incentives are deployed on a “case-by-case basis.”
- “There are very real switching costs from one brokerage to another. I think it’s important to make sure the investment is mutual.
Competition is fierce—and getting fiercer
The first part of this series noted that many agencies themselves are constantly fielding recruitment inquiries. But the March Inman Intel Index survey also showed another side of the story: Recruiting is a key battleground for brokerage leaders.
- Recruitment is a top concern for brokers: Among the brokerage leaders surveyed, twenty three% Says recruitment and retention are “the most challenging parts of today’s business environment.” This beats other responses such as interest rates (20%) Marginal compression (17%) and supervision (17%). (The “other” option relates to recruitment and retention. But respondents who selected this option also provided free-response answers, and these varied widely – meaning recruitment and retention ultimately received the largest proportion of answers).
Photo credit: Jim Dalrymple II
- When asked about the difference between recruitment and retention, 50% of respondents said recruitment was a bigger challenge.only 15% Selected retained.
- Brokers see competition getting fiercer: When asked about hiring prospects over the next 12 months, a majority (38%) said it would “get harder.” Less than a quarter of respondents believe recruiting will become easier in the coming year.
Photo credit: Jim Dalrymple II
- Headcount has stagnated: As Intel previously reported, once fast-growing companies, such as eXp, have experienced slow or reverse headcount growth.A March survey showed this is a common phenomenon; multiple, or 47%of brokerage leader respondents said their headcount has not changed today compared to 12 months ago.only 26% The number of employees grew last year and almost the same number (twenty two%) indicates a smaller number of employees.
Photo credit: Jim Dalrymple II
- But brokers remain optimistic: multiple brokers (43%) also believe their numbers will increase in the coming year.
Photo credit: Jim Dalrymple II
Ultimately, time will tell whether brokers can actually improve their rankings in the coming year despite increased competition and a host of other damaging factors, such as sweeping commission lawsuits.
Intel will continue to delve into agent recruitment over the next month.
Email Jim Dalrymple II
